The Crisis Of Capital

The Crisis in the Abstract

The basis of the present system, where all products are put outside the
control of their immediate producers, can be described equally as wage
labour, commodity production or the market economy. On a world scale, each
kind of alienation supports and reproduces the other.

Although the Soviet Union under Stalin had a highly distorted internal
market, it has remained an important support of the world "free market".
The Russian bureaucracy needed (and still needs) the independence of action
allowed by it's system of wage labour as much as "free enterprise" capitalists.
This commodity allowed the USSR to become comparable to the capitalist
west, both in terms of allowing the Russian economy to trade with the west
for needed technology and capital goods and also by allowing an ideological
division of the world into "communism" and "capitalism" (A division that
politically supports both blocks).

The ability of individual capitalists to relate to each other directly
is an immediate result of the alienation of wage labour and is critical
to capital's ability to expand autonomously. The dynamic autonomy of capital
is what has allowed it to absorb and outpace all previously existing static
systems. All previous "great civilizations" being empires of slaves, capitalism
appears as a system of rationalized slavery.

This autonomous movement of dead labour is at the heart of the contradictions
of the capitalism. The freedom involved in exchange becomes a constraint
on production when the capitalists are unable to see the total conditions
of social labour. Once wage labour and the law of value become the dominant
aspect of society, capital's search for profits distorts more and more
the collective social existence brought into being by capital.
These distortions are both material and social. While the most obvious
absurdity is the impoverishment of the vast majority of working people,
the decay of capital has now reached the point where the destruction of
nature itself is threatened. Capitalism creates great cities, massive means
of altering nature etc. but views its accomplishments in the same way that
it views a bee hive. It is even willing to destroy even the hive for not
producing cheep honey.

Two characteristic tendencies of capital, the lowering of the rate of profit
and the tendency of capital to concentrate, result from contradiction between
production becoming more social and the continuation of individualistic
relations of production.

The lowering the rate of profit is not a result of a decrease in the
amount of goods produced by society but of the tendency of the mass of
capital to increase faster than the productivity of society as a whole.
This assumes that capital pays a mostly constant price for labour. But
this constant price of labour means only that the labour required for survival
remains a constant proportion of a working day. This condition is necesarry
for the discipline of the working class regardless of proportions of constant
and variable capital.
The concentration of capital into fewer and fewer hands is a reflection
of the greater socialization of the means of production. Along with financial
concentration, corporations are constantly organizing industry on a larger
and larger scale for efficiencies of scale in both production and marketing.
This concentration is difficult to manage, since it requires that certain
capitalists loose their position within the system of capitalist management,
which includes both the government and the private sector. Today, as the
final step, those factions which can not compete on the world market are
being dismembered.

The state of the crisis is often hidden under a vail of manipulation by
government and monopolies. No pat conclusions about an immediate collapse
of production etc. can be drawn from even the best economic indices. But
today crisis does not need a prediction but an explanation. We are not
prophets of an eventual crisis but unpredictable crisis but theorists of
today apparently inexplicable crisis.

Capital's contradictions appear as an inability of various capitals to
work together. Capital has a need to destroy various blocks of capital
to remain "healthy". The exact level of production is less important than
the structural situation; this is what causes international and inter-company
rivalry as well as attacks on working class income. The world wars that
the crisis has provoked have come not from economic indices reaching a
certain level but from a confluence of strategic factors. The economy was
merely the motor that unbalences the entire situation.

The crisis manifests itself as a political-economic crisis. The crisis
appears first on the level of a power imbalance. Eventually a dynamic crisis
of capital follows as an effort to solve the crisis by changing the distribution
of resources in society; different factions of capital launch attacks on
each other, the petit bourgeois and the working class in order to increase
the concentration of capital.

The working class itself mostly plays a passive role in within capitalist
struggles while it is capitalism that creates the crises that continually
transform capitalist society. The working class only plays an active role
when it rejects the role that is created for it by capitalism and constitutes
itself as the proletariat, those who have nothing to lose by the destruction
of this society but their chains.

Decadent Capital

The crisis of capital has become continuous in the sense that contradictions
to capital's normal operation appear constantly, not only in the phase
of over-production. This situation is characteristic of decadent capital,
which has been unable to fully solve its previous crises, which reappear
as necessary absurdities in its workings.

Government-aided unions, public works, and social security are necessary
contradictions to the logic of private enterprise, permanent measures that
have expanded from when they were initially needed to increase consumption
during the world depression in the 1930's. Just as they never eliminated
private capitalism, these contradictions are not being eliminated themselves
during the current right-way period. Instead they are modified by further
adhoc solutions to crisis; the expansion of the military-industrial complex,
the private governments of Oliver North in the US or P5 in Italy etc..

Capitalism must now solve its crises in an extra capitalistic manner. The
Russian revolution was the first definitive point where capital showed
that it was unable solve its problems except through its apparent over-throw.
The most advanced proletariat revolution to occur in the twentieth century,
lead by the Bolsheviks, was deformed, by them, into a means of installing
a "substitute bourgeois". The solution to development in a nation where
unequal evolution had left the national bourgeois was too weak for direct
capitalist rule.

Bolshevism was thus the most extreme means of solving the world capitalist
crises of 1920-50 on an economic and ideological level. This required a
complete ideological division of the world into "capitalists "and "communists".
After it destroyed the proletarian revolution, the Bolshevik state created
the most advanced form of state capitalism that existed at that time. This
means of solving the contradiction between concentrated Russian capital
and a weaken Russian Bourgeois was imported back into Nazi Germany and
in part into all advanced capitalist nations. At the same time, the centralist
party, sans the Bolsheviks' hold on marxist theory, became the dominant
model for third world development.

WWI & II were critical points in movement of capital since they solved
world capital's crisis through the defeat of all previous social contracts
and through the violent destruction of an unprecedented proportion of total
world capital (Japan and Germany lost 25-50% of their productive capacity
during WWII). At the same time, they laid the basis for a society of materialized
ideology; the total mobilization of the population became a part of capitalist
accounting and could after wards be used in the management of supply and
demand. Keynesianism first appear as the perfected system for managing
the second World War. It then was continued to manage the peace.

As an artifact of previous crises, decadent capital must constantly adjust
production and consumption ideologically. The "spectacle", the sum of contemplations
within society, now appears as the object of production because a constant
flow of illusions must support both production and consumption. The demand
side of the economy snowballs on itself. "Industrial policy" adjusts free-enterprise
production in the an effort to anticipate the demand artificially induced
by advertising. The ideologies that solved the historical crises of over-production
by creating an economy of extended survival need to be constantly expanded.
This process of expansion appears again as urbanism, as the spectacle,
the sum of materialized ideologies that defend the system. While the same
the problems of an economy of survival still reappear in day to day life,
the spectacle only solved a historical incident of the crisis of capital,
that of 1920-40. The crisis tendency has reappeared now within this "economy
of abundance".

Class struggle is not predicated on a gross economic crisis of capital,
especially in late capital where the contradictions of capital are ever-present.
The class struggle is often conditioned by the crisis of capital. The most
advanced struggles of the last years have come from conditions that are
both immiserating and ill-managed. From May 68 to Italy and Spain, the
totality of capitalist existence has become visibly absurd and intolerable.

The Return of the Crisis

The universal triumph of the capitalist system has also been its downfall;
the return of the classical crisis of capital.

The "Imperial American" world order, created after WWII, is being broken
up by the forces of the market. As full market capitalism develops in more
and more countries, the primitive capitalist accumulation of third world
raw materials is no longer a profit center. This break-up involves all
type of monopolistic sectors from Stalinist nations to trade unions. The
US role as world cop is no longer a profitable investment.

The imperialist world order is dying only slowly. Despite the fact
that the USA's budget deficit has made it a "debtor nation", the US still
earns more on its investments than it pays to foreign investors, since
the US still maintains monopoly markets in many of its client states.
Despite the often touted productivity of Japan's peace-time economy,
the US economy has become more oriented to war materials production. This
happens not because of irrationalism but because an artificial demand must
be maintained for the world market.
In this sense, the world market is hardly more efficient than the slow
moving Russian "Communist" bureaucracy. Instead of an "ideal" market that
finds needs, we have a market that must be constantly "primed" with "artificial"
demand simply to continue production.

The success of newly industrialized countries has brought on a crisis in
all capitalist economies. This can be most obviously seen in the reduction
of American wages during this recent "long expansion period", to compete
with the wages of Japanese and Korean workers.

The world market has been changed by the entry of various cheap labour
commodities. This economic transformation has upset not only production
patterns but has undone the previous social contract, which guaranteed
a high level of social survival.

The world division of labour has become more explicitly a world
labour market. This market is gradually destroying the Keynesians manipulations
various country use to maintain a higher standard of living or a higher
rate of domestic profits. For US capital, the competition of the Japanese
working class with the American working class is more dangerous than the
competition of Soviet state with the American state.

This new form of ownership leaves all previous proprietorships obsolete.
The national bourgeois the world over is showing itself to be a corrupt
and reactionary force, whether in the socialist countries, western or third
world countries while an international bourgeois is being formed by the
owners and managers of the multinationals and the IMF. The riots that greet
even the most fervent nationalist regimes embody this element, even though
they often have nationalistic forms. Student rallies in China focus tremendously
on corruption of the top officials and on "saving the nation." Their repressors
have used a similir argument.

The major capitalist divisions of the world have shifted from ideology
to economics. History has extended the situation of 1969. While in 1969,
"It could almost be said that the history of the last twenty years has
set itself the sole task of refuting Trotsky's analysis concerning the
bureaucracy." [SI Anthology p.256, IS #12] today the world order is changing
equally to refute Lenin's theory of imperialism ("the highest stage of
capitalism"). As the (supposedly deformed) "socialist" nations have shed
their conceits of opposition and entered into direct capitalist relations
with western capital, the symbolic combats of the cold war and the space
race have been replace by the purely economic race to perfect semi-conductors
and super-conductors. Imperialism, the supposedly last phase of capitalism,
is merging more and more with traditional market capitalism as new nations
industrialize and the world labour market develops.

The current crisis of capital is based on internationalization. The
Mexican workers in the US, the Algerian workers in France, and the Turkish
workers in Germany are the beginning of a world proletariat not just because
they have the potentials for an international viewpoint but because they
expose workers where they work to the world market ("normalizing" wages
on a world scale).

Austerity

The crisis appears again in the form of a lower of the rate of profit.
On an immediate economic level, capital has had several responses.

One response has been an increase in the rate of exploitation world
wide; seen in "austerity;" an increase in hours worked and a decrease in
wages. In the advance industrial countries, there has been, as well, a
decrease in social services, manipulated to hit the weakest section of
the working class hardest (this has left many American inner cities resembling
19th century woodcuts).

Another response has been a centralization of investment in various
corrupt mega-projects, projects that are often explicitly attacks on working
peoples' ability to survive; for-profit hospitals, giant military projects,
drug import schemes and "urban renewal".

A third response has been a increase in terror within the largest projects;
more and more corruption must be unearthed by FBI sting operations even
as the amount of corruption increases without limits. This terror also
appears as a huge level of volatility within the entire economy; the manipulation
of various indices is becoming more and more necessary because of the amount
of power changing hands.

The Expansion of Ideology

It is hard to classify all the results of the crisis in terms of simple
economics. The terror of ideology has been an adjunct to the terror of
austerity.

Because of the ability of human beings to duplicate any rational system,
the development of capital presents itself as merely the creation of a
machine; "the world computer"[science fiction], "the mega-machine" [Lewis
Mumford], "the planetary work machine" [various radical groups] etc.. These
formal systems are merely pictures of the form, at any one time, of the
total movement of alienated labour.

The crises that exist in these formal system are in turn only manifestations
of the crisis of capital. Any merely formal problem of capital can be fixed
just like any machine of capital. The crisis of capital comes when the
number of problems has exceeded the ability of capitalists produce fixes.

The New York Stock Exchange has been continually creating buffers and
guilines, both formal and informal, to keep trading "orderly", to keep
prices from fluctuating wildly. These have not prevented instability in
the market but rather they have created a whole industry of experts on
how to get around the guidlines (and a whole industry of catching those
who go outside the guidlines etc., etc.,).

An ideology, as a forced irrationality in human relations, can be
easily applied to solve any one crisis of capitalist management. However,
since the logic of the market place remains, the contradictions reappear
in a different location and the amount of ideology grows without bounds,
in terms of the number of ideologies created and the degree to which they
are applied.

Each ideology must expand simply to keep up with the competition. Militarism
and hatred of the Soviet Union increased under Reagan even as the USSR
showed more forcefully that it wanted nothing but cooperation with US capital.
The terror of looks, best seen in the artificial "need" for women's' thinness,
has been increased as response to the need to simply keep consumer buying
constant.

The terror of ideology tends to increase on all levels. Lies are
what keep the system going but the cost of the lies increases faster than
production of the society (since the fabric of the society it rapidly disintegrating).
For the lower middle class, "born again" type conversions often take place
as a response to set of demands that they can not satisfy. They mirror
the choice that is made by society at large. What is substituted is a single
ideological domination that can crush the hold of all previous ideologies;
tradition, militarism, and toughness.

Thus lies must constantly fight for what is to them a shrinking pie;
they edge out the material needs of workers in their competition to dominate
them; military production has the justification of keeping the economy
going but to maintain it the taxes of all worker must be increased while
their wages are cut. More schools and more jails are being built to control
"the decay of our culture" while those impoverished by work and taxes grow
to fill these prisons.

Inexplicable Collapse

The crisis appears in more uniformly than ever before; all parts of social
life seem to be disintegrating simultaneously. The decline of profits has
not returned us earlier periods of capitalist production but has instead
accelerated capital's "permanent opium war" to sell more commodities with
less use value.

The poverty following the decline of advanced capitalist production
is not the same as the poverty of peasants forced force to work in factories
for the first time. Social terror tends more and more to deprive people
of simple social survival skills, rendering the entire population more
and more as wards of the state.

The system does not create "false needs" but distorts existing needs.
These distortions appear as the system destroys society's informal methods
of meeting a worker's needs and substitutes scientifically engineered commodities
for the most immediate parts of these needs. Thus the spectacular poverty
of those who have been exposed to affluence is greater than the poverty
of those who come from third world peasant back-grounds. Even more than
the misery of the sweatshop, mobile home culture stands as the ultimate
example of the tendency of capital to reducing life to the barest minimums
of required for survival. Songs, home cooking, and personal industry have
ceased; alienated labour is used to pay for all parts of survival.

The spectacle, the system of false consciousness bought by the system
of abundance, has remained while many in society have been reduced to absolute
poverty. The level of social poverty has grown through this entire time
period, with both the rise and fall of the standard of living. The poverty
of not being able to express your position is as miserable as the material
deprivations that are now taking place.

Unions and social services are not a way to "buy-off" the working
class during times of prosperity but a way to control it. These systems
are now being used to enforce the austerity that factions of world capital
now enforce for their own reasons. The defense of the false community created
by welfare agencies or unions is what makes attacks on the working class
seem to suceed without even a fight.

Reform

The crisis has resulted in a polarization of profiteers and rationalizers,
with both reformer and profiteer acting in an increasingly irrational manner.
While corruption has always existed in capitalism, it increases when capital
has reached the limit of normal production (as Rosa Luxemburg documented
in pre-WWI Germany). This is naturally a result the unprofitability of
"normal" investments; speculation on creating monopolies in various industries
has fed the current "investment boom."

Larger and larger fights between factions of capital are characteristic
of a profitability crisis.

FBI "sting" operations that have shown definitively that a massive system
of corruption has become entrenched in American state capitalism. In order
to root out the massive corruption that exists in all state sectors, the
FBI sets up huge operations to create the crimes that it is will ultimately
prosecute (as in "ABSCAM"). While legally prosecuting crime, these actions
can be part of corruption on a higher level, since they are used by one
party or grouping in struggles against another.

Drugs and drug testing are examples of the greater and greater conflicts
of these false opposites. The destruction of the social fabric is used
to sell commodities; both self destruction and the image that this has
nothing to do with our society is sold this way. Cocaine is sold to those
who are most desperate and police and troops to fight the cocaine are sold
to the frightened group one level of the most desperate.

At the same time that their competition increases, the competing
blocks have become more and more obviously identical; democracy and dictatorship
follow each other at a rapid pace with some "democracies" at least equaling
their dictatorial rivals (Brazil and the Philippines are two areas where
a return to democracy has brought an increase in "death squad" type actions).